Start date: Jan 2024

End date: June 2026

Funder: ESRC

One of the overlooked issues of delivering social benefits to their target population is imperfect take-up. The literature, while limited, shows that a proportion of individuals or households eligible for social benefits do not claim it. This phenomenon is not limited to the UK, but is widespread across countries. There are various reasons why take-up of social benefits, especially means-tested, is far from perfect. Such factors include high claiming costs, administrative errors, lack of information about entitlements, and fear of stigma. This target inefficiency distorts the intended impact of social benefits as well as increases the degree of uncertainty surrounding estimates of budgetary implications and attainment of social policy objectives. Despite its relevance, the topic is however still poorly understood. How have the take-up rates evolved over the years? Have they increased or decreased, especially after the rolling out of Universal Credit? Why do eligible individuals choose not to claim benefits? Is non-claiming temporary or permanent? Are there groups in society that are more inclined not to claim social benefits? Answering these questions will help to move away from the assumption – common in the policy debate – of full compliance to benefit rules, provide new insights which can improve policy design, and fill research gaps in the literature.

The primary objectives of this project are:

• to estimate take-up rates for social benefits in the UK and how they have changed over time, particularly for Legacy Benefits and Universal Credit;

• to study the factors affecting take-up rates, focussing on the role of observed and unobserved characteristics of the eligible population, and how these interact with the characteristics of social benefits;

• to analyse the impact of imperfect take-up on a variety of social indicators;

• to explore the influence of targeted policy counterfactuals on take-up and associated social indicators, such as inequality and at-risk-of-poverty rates.

This study exploits a unique combination of UK longitudinal data (UKHLS) and eligibility simulations based on the UKMOD tax-benefit calculator. In simple terms, UKMOD identifies whether an individual is entitled to a specific benefit, while UKHLS allows us to identify whether he or she receives the benefit. Estimates of take-up rates are obtained by dividing the number of actual recipients by the number of eligible individuals.

We then exploit the longitudinal dimension of UKHLS, where the same individuals are followed over many years, to provide insights into key factors that drive take-up behaviour over time, to determine whether (non-)take-up of social benefits is temporary or persistent and whether there are innate characteristics of the individuals that explain this suboptimal behaviour.

The outcomes of this study can be valuable for policymakers and administrators by helping them to better understand how to improve the target effectiveness of policy programs. By tackling behavioural biases that can lead individuals to make suboptimal decisions, we can offer an alternative way to address inequality or poverty than directly intervening with traditional fiscal policy tools such as modifying eligibility conditions or benefit amount. Also, the study has the potential to make significant contributions to the global social policy literature by providing insights that can be applied to other countries.

Additionally, this research will be useful to scholars from various disciplines looking to understand the effect of benefit (non)-take-up on social outcomes (e.g., inequality) and individual outcomes (e.g., economic security, poverty and persistent poverty, deprivation, health and well-being).

Project outputs

Mitton, L., Vella, M., Popova, D. and M. Richiardi (2026). Trends in Child Benefit take-up in the UK since 2008. CeMPA Working Paper 5/26, Institute for Social and Economic Research, University of Essex. https://www.iser.essex.ac.uk/research/publications/working-papers/cempa/cempa5-26

Popova, D. Vella, M., Mitton, L. and M. Richiardi (2026).  Unclaimed Support: Changes in the Take-Up of Means-tested Benefits in the UK since 2008. CeMPA Working Paper 6/26, Institute for Social and Economic Research, University of Essex. 

https://www.iser.essex.ac.uk/research/publications/working-papers/cempa/cempa6-26

Start date: Apr 2022

End date: Mar 2025

Funder: National Institute for Health Research

The central research question in FINCH is whether indirect taxes on food and non-alcoholic beverages (FNABs) can be repurposed and restructured to create incentives for healthy food consumption, without increasing the tax burden on households and without adverse distributional impacts relative to the current taxation system.

Successful international experiences with taxes applied to sugar-sweetened beverages and selected foods show that taxes can provide incentives for both consumers and food manufacturers in the direction of healthier food production and consumption. However, for taxes to have a meaningful impact on overall diet quality and health outcomes, a much wider range of FNABs need to be targeted and a more sophisticated design needs to be adopted to strengthen incentives and prevent unwarranted substitutions. Nutrient profiling models today can support the design of effective FNAB taxes and subsidies in line with dietary guidelines and improved health outcomes.

Building on a collaboration with PHE and leveraging inputs from a wide range of stakeholders, the FINCH project aims at:

A. Developing a new research infrastructure for the ex-ante analysis of the impacts of FNAB fiscal policy scenarios, in the form of unique data and policy modelling resources that are made available for public use;

B. Undertaking a systematic review of price elasticity data and new analysis of the relationship between food prices, consumer behaviour and diet quality, based on LCF data;

C. Designing and estimating the impacts of alternative FNAB fiscal policy scenarios on: (i) household FNAB expenditure and disposable income; (ii) individual dietary intakes; (iii) diet-related morbidity, mortality and quality-adjusted life expectancy; and, (iv) indirect tax revenues, tax administration and compliance costs.

The project is structured into five Work Streams (WSs), including an overarching PPI, stakeholder engagement and dissemination WS, along with four research WSs closely reflecting individual objectives of the project. Over a period of three years, the researchers engage with relevant stakeholders, including the general public; consolidate the research infrastructure required to evaluate fiscal policy scenarios by statistically matching the Living Costs and Food survey (LCF) and the National Diet and Nutrition Survey (NDNS), and by enhancing and extending the policy simulation models UKMOD (Essex) and Health-GPS (Imperial), before making these resources available for wider use; systematically review and assess existing evidence of FNAB price elasticities in order to identify relevant price elasticity values for the design and simulation of a set of fiscal policy scenarios that would promote changes in consumer FNAB choices as well as FNAB reformulation by manufacturers; feed findings back to stakeholders and to the research community for validation and identification of potential implementation barriers.

The project delivers new resources and analyses that are expected to stimulate further research, inform the public debate on the use of fiscal measures to incentivise healthy food consumption and production, and contribute to a radical rethink of the objectives of indirect taxation in the FNAB sector, given the detrimental health and environmental impacts of current dietary patterns in the UK.

Project outputs

Popova, D., Richiardi, M. and J. van de Ven (2026). From Pandemic to Cost-of-Living Crisis: The Distributional Impact of UK Tax and Benefit Policies, 2019-2023. CeMPA Working Paper 1/26. https://www.microsimulation.ac.uk/publications/publication-588903/

Start date: Jan 2023

End date: Jan 2025

Funder: abrdn Financial Fairness Trust

The project aims to maintain UKMOD – an open-source tax-benefit model – as a free resource, and support its transition to long-term sustainability by fostering use of the model by third sector financial advisory and advocacy organisations.

UKMOD permits analysis of the effects of taxes and social benefits on household incomes and work incentives for the population of each nation in the UK, as well as user-defined individual profiles. It is unique as it features great flexibility in the scope of its simulations and ensures cross-country consistency of the modelling approach and comparability of the results with the EU models. 

Start date: Feb 2021

End date: Jul 2023

Funder: ESRC

Background

The median gender pay gap has declined dramatically in the UK from 36.4% in the 1970 (O’Reilly, Smith et al. 2015) to around 18% in the most recent data (ONS 2018). Still, by international standards the pay gap is high: the UK has the fourth largest gender pay gap in the EU and the eighth largest of OECD countries (OECD 2019).

Researchers and policy makers have focused on gender differences in education and labour market experience as the likely drivers of the pay gap. However, today these explanations no longer stand up to scrutiny. Women are on average better educated than men and they are much less likely to withdraw from the labour market for long periods of time. Nevertheless, women earn on average about 10% less than men even when they work full-time and have similar education and labour market experience.

While explanations focusing on women’s potential lower productivity as the cause of the gender pay gap have been thoroughly investigated and found inadequate, there is less evidence on the role played by employers. This research will contribute to addressing this gap.

The standard economic model of the labour market assumes that wages are determined by the market and that individual employers cannot choose the wages they offer to their employees. A different model assumes that for a variety of reasons competition is not perfect and employers have some discretion over the wages they offer. This wage setting power is likely to be weaker when workers are mobile. Mobile workers will leave an employer offering wages below the market rate. However, if workers are relatively immobile, employers can exploit this ‘immobility’ by offering them lower wages. If women are more constrained by family responsibilities in the types of jobs that they will take-up or in the amount of time and effort they can devote to job search, they will generally be more immobile and thus at a disadvantage. Women’s family responsibilities might be ultimately responsible for the gender pay gap but not because they limit their productivity but rather because they reduce their bargaining power with firms.

Project aims 

This research project examines the role of employer wage-setting power in driving the gender pay gap in two ways. First, using data from the UK’s largest longitudinal study, it investigates the extent to which job-to-job mobility patterns differ between men and women, and whether any differences can explain the observed gender gap in pay progression. Second, it develops an index of employer wage-setting power based on geographical location, industry and cost of travel and test whether the index can explain gender differences in pay progression.

Tackling the gender pay gap is a widely shared goal among policy makers, political parties, women’s groups, trade-unions and employer organizations. A better understanding of the factors driving the gap is essential to design effective policies. For example, in April 2017, the UK government has mandated large employers report annually on the pay gap in their organization. If women’s lower productivity is to blame for the gender pay gap, such legislation is likely to be ineffective and even counterproductive. On the other hand, mandatory reporting is likely to be more effective if employers’ stronger wage-setting power is a significant factor behind the pay gap. More generally, if employers enjoy significant wage setting power relative to some of their employees, this has implications for legislation on anti-discrimination, the minimum wage, trade-unions and family policy.

Methods

To carry out our analyses, we use the UK Household Longitudinal Study (UKHLS), a large panel survey that follows approximately 40,000 households and interviews yearly all their adult members. In addition to a wide range of demographic and labour market information, the survey collects detailed information about the employment history between interviews (Poster-Vinay and Sepahsalari 2019) . Information is available on job to job changes, job to non-employment and non-employment to job transitions. Following the literature, we focus on gender differences in hourly pay. We estimate, separately for men and women, a series of hourly wage growth equations using fixed effects and random effects regressions. Our focus is on the effects of different types of job mobility on real wage growth while controlling for a wide range of individual characteristics, including family composition, employment and education history, and personality traits. We also examine the extent to which the effect of job mobility changes when parenthood is included among controls and whether the returns to mobility are different for parents and childless persons, and how these effects differ for men and women. The UKHLS collects information about weekly pay as well as the usual number of hours per week allowing for an indirect measure of hourly pay to be constructed. However, it is well known that this measure suffers from a significant amount of measurement error. We use results from previous work (Avram and Harkness 2018), where we have applied the methodology proposed by Skinner, Stuttard et al. (2002) to UKHLS data to obtain more accurate measures of hourly pay.

Project outputs

Avram, S., Harkness, S. and D. Popova (2024) Gender and parenthood differences in job mobility and pay progression in the UK. Social Forces.   https://doi.org/10.1093/sf/soae068

A short explainer: https://www.iser.essex.ac.uk/wp-content/uploads/files/misoc/reports/explainers/Gender-pay-gap.pdf

Coverage in the Financial Times: https://www.ft.com/content/254582f8-6253-4cb3-9bd0-f6ae82ac0125

Start date: 16 Dec 2020

End date: 30 Jun 2021

Funder: Greater London Authority

The Covid-19 pandemic has severely impacted many Londoners’ incomes as well as outgoings. Where prior to the crisis financial hardship in London had largely been characterised by low pay and in-work poverty, unprecedented economic conditions have meant more and more people have become unemployed. Due to widespread economic shutdown, the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS) have attracted more than 10 million claims since March 2020, but significant new demand also fell on the existing benefits system. London households in receipt of Universal Credit (UC) more than doubled between February and August 2020 (compared with an increase of 75% across the rest of England). There were already 2.5 times more unemployment benefit claimants in London as of May than at the beginning of the year, a steeper increase than in the rest of the country (where the number rose 2.1 times). The claimant count has continued to rise since then, now 2.7 times the number in January for London, though it has started to decrease elsewhere in the UK.

Since March 2020, the rules and operations of the welfare system have been subject to a range of reforms, intended to support people to isolate, shield and to facilitate social distancing. These included:

• Increases to the level of some benefits – claimants of Universal Credit and Working Tax Credit now receive around £20 more a week and the amount available in housing support has increased.

• Measures to facilitate social distancing and support those who need to isolate or shield – changes were made to Statutory Sick Pay, sickness and carer benefits in order to help people follow public health guidelines.

• Temporary expansion of eligibility – rules were relaxed for some groups such as prisoners on temporary release and claimants of tax credits whose employment was affected.

This project is aimed at providing evidence on the overall impact of the new economic circumstances resulting from the Covid-19 pandemic on household incomes in London, including of the extent to which these new policies had helped mitigate deepening poverty levels. 

Project outputs

Collado, D., D. Popova and M. Richiardi (2021). Covid-19 and financial hardship in London. CeMPA Working Paper 9/21. https://www.microsimulation.ac.uk/publications/publication-546966/